HP raises dividend, touts cloud computing

By Scott Martin, USA TODAY

SAN FRANCISCO  Hewlett-Packard said Monday that it plans to raise its dividend for the first time in more than a decade and one day soon will sell “cloud computing” services to the public.

Hewlett-Packard CEO Léo Apotheker detailed the computing giant’s next-generation strategy, one that looks to cloud computing to deliver software applications and services for consumers and businesses.

At a media event here, HP’s chief made his first go as corporate pitchman No. 1, touting the company’s strength across numerous business units before launching into an announcement that HP is creating a public cloud and a consumer app store.

“We will grow an open marketplace that integrates with our services, a consumer app store, and an enterprise and applications services catalog,” he said “We only vet the applications for security and interoperability to facilitate an environment that is trusted.”

The move comes after HP last month showcased its slate rival to the iPad, dubbed TouchPad, a project headed and unveiled by former Apple executive Jon Rubinstein, who serves as general manager of the HP-owned Palm business unit. HP bought Palm last year for $1.2 billion. The company at that time showed off some of its WebOS features

“WebOS is an unbelievably attractive and stunning technology,” Apotheker told members of the media on Monday.

The TouchPad, he said, will boast a 10-inch screen and is on track to come out in June. With WebOS, the CEO said, he hopes to reach 100 million devices. “There will be wave after wave of technology coming out to support the WebOS platform.”

Apotheker, who took the top job at HP last November, already faces fresh challenges as the company reported earnings last month that underwhelmed investors on all-important forward-looking revenue guidance. The media event comes as HP’s stock is languishing roughly 25% below its 52-week. HP shares closed Monday at $41.49, down 16 cents.

Apotheker is going to have to build this next-generation HP around cloud computing on the heels of outgoing CEO Mark Hurd, who notoriously slashed research and development budgets at the Silicon Valley giant. The storied technology titan was widely known as a research powerhouse before the Hurd era.

“R&D is not just measured in dollars,” Apotheker said during a question-and-answer session after the event.

The dividend hike is an attempt to win over Wall Street.

The dividend has been 8 cents a share since 1998. It will rise to 12 cents per a share the next time the board of directors declares a dividend, which should be in May, said HP’s chief financial officer, Cathie Lesjak.

HP plans on increasing the dividend by a double-digit percentage every year, Lesjak said.

She also set an earnings target of at least $7 per share, excluding items, by 2014. The company earned $4.58 per share, on that same basis, in the latest fiscal year.

Contributing: Associated Press

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